Quis custodiet ipsos custodes?

Who will guard the guards, asked the Roman poet Juvenal back in the first century, and it is a question that has troubled us ever since.  Last week, Shambhu Prasad Chalise, a section officer at the Department of Money Laundering Investigation (Nepal’s FIU), was caught taking a bribe of one million rupees (about £6,100) from a Japanese migrant worker called Gurung.  Apparently Chalise had earlier filed a report about Gurung at the DMLI, mentioning that he had accumulated millions of “disproportionate properties” (suspicious funds), and the allegation is that Chalise solicited a bribe from Gurung in order to make that report disappear.  Gurung instead reported the matter to Nepal’s Commission for the Investigation of Abuse of Authority (terrific name – we all need one) and gave them audio and video evidence of Chalise’s actions.  The CIAA set up a sting operation, giving Gurung cash to hand to Chalise, and police arrested the officer as he was taking hold of the money at Gurung’s home – rather damningly, he had with him the official documents promising to put Gurung’s case on hold.  Chalise has been taken into custody, but the CIAA suspects that he was not acting alone and that DMLI Director General Choodamani Sharma could also be involved: “We believe that Chalise alone could not have arranged such a big deal without the consent from his senior officers.  Things will become clear after we are done interrogating him.”

When I talk in AML training about criminals infiltrating organisations in order to ensure the trouble-free laundering of their funds, and about the importance of making SARs directly to the MLRO because there is no way of knowing who else among your colleagues might be involved in the suspected laundering, I am often asked, “But what about the MLRO?  Isn’t he a prime target for criminal collusion and coercion?”  And absolutely right: he is.  If I were a criminal, seeking to ensure the safe passage of my dodgy money through an institution, I would love to own the person who can adjust the AML procedures in my favour, and sign off on my due diligence, and approve my continued business, and – if all else fails – make sure that any SARs mentioning me end up in the shredder rather than on the desk of the FIU.  And so, unfair as it may sometimes seem, those who work in AML – MLROs, other compliance staff, officers in FIUs – must be whiter than white, cleaner than clean.  There must be not the faintest sniff or lightest stain of impropriety about them – and that is quite a standard to attain and a heavy burden to carry.  I am reminded of it myself every year as I diligently complete my tax return, and religiously declare the 47p interest I have earned on my savings.

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